General Electric has lost value equal to Facebook since peak
General Electric ousts Flannery and names Larry Culp as CEO
General Electric removed John Flannery as CEO and named Larry Culp as the new CEO of the company.
General Electric’s decision Monday to part ways with CEO John Flannery just one year into his tenure came amid a prolonged stock slide that has seen the one-time industrial juggernaut shed market value roughly equal to that of Facebook.
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The Boston-based company’s shares closed at $11.29 on Friday, with a total market capitalization of about $98 billion. At its peak on Aug. 28, 2000, General Electric had a market value of $594 billion, marking an overall loss in value of about $485 billion from peak levels, according to data from Dow Jones Market Group. By comparison, Facebook’s current value is hovering near $473 billion.
General Electric shares had declined nearly 56 percent since Flannery took over as CEO with a mandate to cut costs and refocus the company on its profitable segments. The company has lost more than $122 billion in value over that same period.
“GE remains a fundamentally strong company with great businesses and tremendous talent,” H. Lawrence Culp, the company’s new CEO, said in a statement. “It is a privilege to be asked to lead this iconic company. We will be working very hard in the coming weeks to drive superior execution, and we will move with urgency.”
GE’s stock rose more than 10 percent on news of Flannery’s surprise departure. Company shares are on pace for their largest single-day percentage increase since March 2009.
Bloomberg was first to point out the size of General Electric's loss in market value.
GE has turned to cost-cutting measures in recent quarters to offset sagging revenues, selling off a light-bulb segment once spearheaded by Thomas Edison and its distributed power business. Flannery slashed GE’s dividend in half and vowed to sell $20 billion in assets by 2020.
The restructuring has had little positive impact on General Electric shares. The Dow Jones Industrial Average removed GE from the blue-chip index last June, citing the company’s poor performance.
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